CONSULTING AGREEMENT
This agreement dated as of December 27, 2006 (the "Agreement") shall set
forth the terms under which Treyex, LLC. ("Treyex"), through its employees
Xxxxxx Xxxxx ("Xx. Xxxxx") and Xxxxxxx Xxxxx ("Xx. Xxxxx," together with Xx.
Xxxxx, the "Consultants"), has rendered and shall render professional services
(the "Services") to Harbinger Capital Partners Master Fund I, Ltd. ("Master
Fund") and Harbinger Capital Partners Special Situations Fund, L.P. ("Special
Situations Fund" and together with Master Fund, "Harbinger Capital Partners").
This Agreement shall supersede all prior written agreements among these parties
in their entirety.
The term of this Agreement shall begin December 27, 2006, and continue
indefinitely unless and until terminated immediately upon written notice by
either party.
Services may include performing research, designing models, reviewing
documents, performing quantitative and qualitative analysis, evaluating
securities and preparing reports. Consultants is expressly prohibited from
communicating with any proposed or actual Harbinger Capital Partners'
counterparty on behalf of Harbinger Capital Partners about the purchase or sale
of securities, or otherwise communicating in a manner that would require
Consultants to possess a securities license, unless accompanied by Xxxxxx
Xxxxxxx or a person designated by him. Consultants shall use his best efforts to
perform the Services in a timely fashion.
Treyex shall be paid for the performance of Services in connection with
Openwave at a rate of $50,000.00 per month during the term of this Agreement,
payable on the 30th of each month (the "Retainer"). Harbinger Capital Partners
shall reimburse Treyex for any travel or third party consulting or legal costs
which Harbinger Capital Partners at its sole discretion directs (in writing)
Treyex to incur, however, provision of the Services shall not require any such
costs to be incurred. Treyex shall be responsible for all federal, state, and
local tax payments related to amounts it receives under this Agreement and
Harbinger Capital Partners shall not make any withholdings from the amounts paid
to Treyex. Treyex and Consultants' relationship to Harbinger Capital Partners
shall be that of an independent contractor and this Agreement shall not be
construed to create an employer-employee relationship between Harbinger Capital
Partners and Treyex or Consultants. With respect to Harbinger Capital Partners'
investment in Openwave Systems, Inc. ("Openwave"), Treyex shall be entitled to a
fee (the "Success Fee") as follows:
1. If the price of Openwave's common stock (the "Shares") rises during
the term of this agreement by 20%, Treyex shall be entitled to a fee
of 2.4% of the profits made by Harbinger Capital Partners on its
investment.
2. For each additional 1% increase in the price of the Shares during the
term of this Agreement, Treyex shall be entitled to an additional
0.02% of the profits made by Harbinger Capital Partners. All prior
monthly Retainer payments (including such payments made under the
previous agreement between Harbinger Capital Partners and Treyex)
shall be credited against the Success Fee.
3. The Success Fee is payable only if there is a realization of at least
a 20% profit upon the sale by Harbinger Capital Partners of its entire
position of the Shares.
4. Treyex's right to receive Success Fee payments is further contingent
upon Xx. Xxxxx being available to serve on the board of directors of
Openwave, as well as Treyex (a) helping to find additional strategic
and financial investors in Openwave; (b) identifying potential
candidates for senior management positions that may become available;
(c) helping Openwave execute its business plans and (d) implementing
any other reasonable request made by Harbinger Capital Partners.
5. The Success Fee will be calculated based on the lowest entry price
paid by Harbinger Capital Partners for the Shares.
6. If Harbinger Capital Partners returns to passive-investor status with
respect to its ownership of the Shares, Treyex will be entitled to the
Success Fee only if Harbinger Capital Partners sells its entire
position of the Shares for at least a 20% profit within 90 days of
returning to such a passive-investor status. Harbinger Capital
Partners will promptly notify Treyex in writing of becoming a passive
investor. Passive-investor status shall have the meaning set forth in
Section 10. If Harbinger Capital Partners returns to passive-investor
status, the Success Fee contingencies in Section 4 will no longer
apply.
7. If, after returning to passive-investor status with respect to its
ownership of the Shares, Harbinger Capital Partners sells its entire
position of the Shares after 90 days for any profit, Treyex shall be
entitled to an additional fee. Such additional fee shall be calculated
by (x) totaling Retainer fees paid to date (the "Retainer Total") and
(y) multiplying the Retainer Total by the percentage of profit.
8. If Treyex terminates this Agreement, Harbinger Capital Partners will
have no obligation to pay the Success Fee; however, if Harbinger
Capital Partners terminates this Agreement, the Success Fee provisions
will survive and remain payable upon the sale by Harbinger Capital
Partners of its entire position of the Shares.
9. For purposes of this Agreement, profit shall mean realized gain, net
of all expenses incurred by Harbinger Capital Partners, including, but
not limited to, normal brokerage commissions and extraordinary fees
associated with the proposed proxy solicitation by Harbinger Capital
Partners.
10. For purposes of this Agreement, passive-investor status shall mean
when Harbinger Capital Partners no longer actively seeks to influence
or change management or other elements of the operation of Openwave's
business. If Harbinger Capital Partners returns to passive-investor
status, the Success Fee contingencies in Section 4 will no longer
apply. As long as Xx. Xxxxx is on the board of directors of Openwave,
Harbinger Capital Partners will not change its status to that of a
passive investor.
Neither Treyex nor Consultants shall be entitled to any other compensation,
bonus, benefits or other remuneration from Harbinger Capital Partners or be
eligible to participate in benefits or privileges given or extended by Harbinger
Capital Partners to its employees. Neither Harbinger Capital Partners nor Treyex
or Consultants shall have the power to create, and shall not represent to any
person that it has the power to create, any express or implied obligation on the
other's behalf.
Harbinger Capital Partners may elect to provide Treyex or Consultants
certain confidential and/or proprietary information with respect to its business
(the "Confidential Information"). Confidential Information shall not include
materials or information in the public domain other than through a breach of
this Agreement by Treyex or Consultants, or materials or information obtained
from a third-party not subject to confidentiality obligations with regard
thereto. Treyex and Consultants' use of any Confidential Information shall be
solely for the purpose of providing Services to Harbinger Capital Partners.
Except as required by law, regulation or an order in a legal proceeding, Treyex
and Consultants may not disclose Confidential Information without Harbinger
Capital Partners' prior written consent.
Treyex or Consultants will provide Harbinger Capital Partners with certain
information in writing or by electronic mail. Harbinger Capital Partners may use
such information as it deems desirable, provided that Harbinger Capital Partners
shall not be permitted to share such information with third-parties other than
its counsel and/or as required by law, regulation or an order in a legal
proceeding. Harbinger Capital Partners agrees that Treyex or Consultants may
share such written or emailed information with third-parties, except to the
extent that it reveals Confidential Information of Harbinger Capital Partners.
Without the prior consent of Openwave, Xx. Xxxxx shall not share with
Harbinger Capital Partners any confidential information regarding Openwave which
Xx. Xxxxx may obtain in connection with Xx. Xxxxx'x service as a director or
other fiduciary of Openwave.
For so long as Xx. Xxxxx shall be a member of the board of directors of
Openwave, any actions taken or decisions made by Xx. Xxxxx in his capacity as a
director of the Openwave shall be independent of, and not related to or arising
out of, this Agreement. Nothing in the Agreement shall prohibit or impede Xx.
Xxxxx from (i) taking any action which he reasonably believes to be in
furtherance and fulfillment of his duties to Openwave, (ii) otherwise fulfilling
his obligations and performing his duties as a director of Openwave.
Harbinger Capital Partners shall indemnify Treyex and the Consultants
against expenses (including attorneys' fees), judgments, fines, settlements and
other amounts actually and reasonably incurred in connection with any
proceeding, arising out of the performance of the Services under this Agreement
and running for the board of directors of Openwave, as these expenses are
incurred. This indemnification right shall survive for a period of one year
after termination of this Agreement.
This Agreement states the entire understanding of the parties with regard
to its subject matter and may not be amended or modified except in writing,
signed by each of the parties named below.
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IN WITNESS WHEREOF, the parties hereto have either executed and
acknowledged this Agreement, or caused it to be executed and acknowledged on
their behalf by their duly authorized officers all as of the date first above
written.
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
By:
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Name:
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HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
By:
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Name:
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TREYEX, LLC
By:
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Name:
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CONSULTANTS
By:
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Name:
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By:
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Name:
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XX 00000 0003 734562
